Is NY Ready for IPO Primetime?

This week two NY tech IPOs are expected to price, namely Etsy and Virtu Financial. Given that there were only six NY venture capital backed tech/healthcare IPOs in 2013 and 2014 combined that I am aware of, having two IPOs in one week is a rare event; at least for now. With NY based On Deck Capital going public only just this past December, the increasing pace of NY IPOs and the potential pipeline of future IPOs raises the question whether NY is ready to break out in terms of generating IPO caliber companies.

As I wrote about in January in my prior post regarding NY’s tech ecosystem, NY’s relatively young tech ecosystem when compared to Silicon Valley or Massachusetts has shown tremendous success in total venture dollar investments and M&A exits, but relatively limited success in IPO exits. It is my view that an increasing number of IPO exits, followed by growing market capitalization companies that can be consolidators in their respective markets will be needed in order for the NY tech ecosystem to maximize its prosperity over the longer term.   While NY’s tech ecosystem is broad based from a vertical perspective, chances are NY will be most successful in producing innovative and disruptive companies in new tech verticals that have roots in traditional NY based industries such as financial services, retail, fashion etc. Thus, it is not surprising that On Deck Capital and Virtu Financial are players in fintech while Etsy is a player in e-commerce/retail.

The following table shows some of the recent NY tech/healthcare IPOs in the past couple of years.   Besides being a somewhat short list, the after market stock performance of these recent IPOs has been mixed with Shutterstock so far being the only tech/non-biopharma company on the list to show robust after market appreciation post the first day of trading.   Time will tell if On Deck, Etsy, Virtu Financial and other NY IPOs in the pipeline will become good public investments. As a homegrown New Yorker and current angel investor in NY start-ups, I am clearly rooting for the home team to be a winner!

IPO Date IPO Price Closing Day of IPO 4/10/15
Varonis 2/28/14 $22 $44 $27
Tremor Video 6/27/13 $10 $8.50 $2.40
Borderfree 3/20/14 $16 $20 $6.72
Shutterstock 10/10/12 $17 $22 $71.14
Everdadyhealth 5/28/14 $14 $13.50 $12.57
Intercept Pharma 10/11/12 $15 $19.05 $179.25
Ophthotech Corporation 9/25/13 $22 $26.30 $50
On Deck Capital 12/17/14 $20 $27.98 $19.53